The document summarizes the major events of the "Great Inventory Correction" that occurred in the technology industry in 2000: - Demand for tech products rapidly declined, leading to a surplus of inventory and excess production capacity for chipmakers and PC companies. Cisco alone wrote off $2.25 billion in equipment. - To mitigate future risks, tech companies focused on making their supply chains more resilient through collaborative forecasting with customers and adopting SCM tools. - As companies worked to reduce inventories while awaiting market recovery, focus remained on supply chain resilience, collaboration, and real-time information sharing to navigate uncertainties in the high-tech industry.

1. CASE STUDY
ON
THE GREAT
INVENTORY
CORRECTION

2. Members of Group 11
1910235151 Bishal Das
1910435152 Marjan Hossain
1912135153 Roksana Khatun
1912135154 Tamanna Khatun
1910735155 Md Mursalin
1912035166 Zareen Tabassum Rashid
1910935167 Faisal Kabir Sardar
1910835168 Shubhankar Chakrabarty
1910735169 Faysal Ahmed Siddique
1912435170 Rifath Jahan Munny

3. Overview of the Great Inventory
Correction
• The technology industry experienced a significant downturn in the latter part of 2000,
leading to a rapid decline in demand for various tech products.
• Unlike an abundance of resources, the issue was a dearth of demand, resulting in a
surplus of inventory and capacity for chipmakers and PC companies.
• Networking and telecom equipment manufacturers, including Cisco, faced substantial
losses, with Cisco alone writing off a staggering $2.25 billion worth of equipment.
• To mitigate future risks, tech companies embarked on strategic initiatives to make their
supply chains more resilient.
• SCM tools relied on historical data and speculative projections, making accurate forecasts
challenging in this dynamic environment. companies, in response, began focusing on
collaborative forecasting with customers, adopting.
• As tech companies work to reduce inventories and await market recovery, the focus on
supply chain resilience, collaboration, and real-time information remains crucial in
navigating the uncertainties of the high-tech industry.
3

4. HOW DO YOU ANTICIPATE ALTERA'S CUSTOMERS
WILL REACT TO THIS NEW
STRATEGY?

5. Anticipated
Reactions:
• Positive reaction
• Negative reaction

6. WHAT ARE THE ADVANTAGES AND
DISADVANTAGES FOR ALTERA'S
CUSTOMERS?

7. 7
Advantages for
Altera's Customers:
• Improved Responsiveness
• Increased Flexibility
• Reduced Inventory Costs
Disadvantages for
Altera's Customers:
• Potential Supply Disruptions
• Possible Price Increases
• Uncertainty

8. WHAT INFORMATION DOES FLEXTRONICS HAVE
THAT ITS CLIENTS DO NOT?

9. Information Flextronics
Has:
• Detailed Supply Chain Data
• Market Trends
• Supplier Performance
9

10. WHY FLEXTRONICS HAS THIS INFORMATION?

11. 11
Why Flextronics Has This
Information:
• Role of a contract manufacturer
• Direct involvement in the production
process
• Established relationships with a wide
range of suppliers

12. HOW CAN FLEXTRONICS LEVERAGE THIS
INFORMATION?

13. 13
• Improved Forecasting
• Strategic Decision Making
• Value-Added Services
• Negotiation Power
Leveraging the Information:

14. 14

15. THANK YOU
-Group 11